Half a dozen insurers without CEOs for three months, regulator shows no interest in appointments
Although the Institutional Governance Directive, 2080 of the Nepal Insurance Authority mandates that a Chief Executive Officer (CEO) be appointed within 3 months of the position falling vacant, 9 insurance companies have been without a CEO for over three months. Despite clear legal provisions, the Authority has shown no interest in enforcement.
Kathmandu. The Nepal Insurance Authority's Institutional Governance Directive, 2080, mandates that any insurer must appoint a Chief Executive Officer (CEO) within 3 months of the position falling vacant. Sub-directive 11 of Directive 25 explicitly states that the CEO position cannot remain vacant for more than 3 months. This directive was issued by the Authority's Board of Directors, and its enforcement is also the Authority's own responsibility.
Not only the Institutional Governance Directive but also the Labor Act, 2074 has provisions regarding how long an organized institution can remain without a CEO. According to Subsection (6) of Section 134 of the Labor Act, except in cases where the employer themselves files a complaint or report and is imprisoned, if the suspension period exceeds 90 days, the employer may terminate the service of such worker. When terminating service in this manner, the employer does not need to provide an opportunity for a hearing to the concerned worker.
However, despite clear provisions in both the Labor Act and the directive issued by the Insurance Authority itself, two reinsurance companies along with 7 insurance companies have been without a CEO for more than three months. The Authority, however, has shown no interest in enforcing such provisions.
Companies without CEOs:
- Nepal Reinsurance Company – CEO suspended, facing legal charges
- Himalayan Reinsurance – CEO suspended, facing legal charges
- Himalayan Life Insurance – CEO position vacant, appointment process stayed by Supreme Court order
- Crest Micro Life – CEO position vacant
- Nepal Micro – CEO position vacant
- Liberty Micro Life – CEO position vacant
- Protective Micro – CEO position vacant
- Guardian Micro Life Insurance – CEO position vacant
Although Himalayan Life Insurance published an advertisement for CEO appointment, the appointment process has been stayed by a Supreme Court order. Multiple cases are pending in court against the accused CEOs. While they were released on bail in one case during the preliminary hearing, they remain in custody for trial in other cases.
Since promoters and directors of Himalayan Reinsurance have been accused in cases related to money laundering, insurance-related offenses, banking offenses, and securities-related offenses, the CEOs of these nine insurance companies have been suspended since Jestha 28 (June 11, 2023). Some of them are still in custody for trial.